WC Varones

Don't lend your hand to raise no flag atop no ship of fools

Your industry are belong to us now

While Americans keep spending their bucks on plastic trinkets that will be obsolete in five years, the people selling those trinkets are turning around and buying things that matter...like our aircraft manufacturers.
Cirrus Industries Inc., parent company of Cirrus Aircraft, has been sold to China Aviation Industry General Aircraft Co. (CAIGA) of Zhuhai, China, but it appears the company will continue to build parts in Grand Forks, N.D., and assemble airplanes in Duluth, Minn.
We can all have a good laugh when our granddaughters are hiding in cargo holds to sneak into China and work in massage parlors. Blonde girls good price--sucky sucky!

At least we had fun toys back in 2008.

GOP: Gentlemen on Parole

The headline is taken from a quote by Woody Woodrum, San Diego long-time Republican and O.T. (Original Tea-partier), in this Daily Caller piece on the American Policy Summit in Phoenix, where Tea Partiers vowed to hold Republicans to their promises. Woodrum's quote is exactly right. If these Republicans won't get the spending under control, we'll keep throwing them out until we find someone who will.

Our friend Leslie Eastman is at the summit and has posts here and here. Beers with Demo has more notes here.

Michael Barone: Americans want free markets, not crony capitalism

In a column that touches on the same themes I wrote about in Government-sponsored income inequality, Michael Barone writes:
The recoil in 2010 against the Obama Democrats' vast expansion of the size and scope of government seems to have a cultural or a moral dimension as well. It was a vote, as my Washington Examiner colleague Timothy P. Carney wrote last week, expressing "anger at those unfairly getting rich -- at the taxpayer's expense."

Those include well-connected Wall Street firms like Goldman Sachs that got bailed out and giant corporations like General Electric that shape legislation so they can profit. They include the public employee unions who have bribed politicians to grant them pensions and benefits unavailable to most Americans.

A government intertwined with the private sector inevitably picks winners and losers. It allows well-positioned insiders to game the system for private gain. It bails out the improvident and sticks those who made prudent decisions with the bill.

Modest-income Americans think this is wrong. They want it fixed more than they want a few more bucks in their paychecks.

The column starts out discussing how establishment politicians and academics are dumbfounded that the working class isn't falling for Obamunism. It's reminiscent of CNN "reporter" Susan Roesgen lecturing a Chicago Tea Partier that he should be thankful for the pork Obama is sending to Illinois.

Stephanie Pomboy: Bernanke has blood on his hands

This weekend's Barron's has a great interview ($) with Wall Street strategist Stephanie Pomboy of MacroMavens. She says the Dirty Fed caused the financial crisis with easy money, the Dirty Fed created the commodity bubble with easy money, and the Dirty Fed is going to try to fix everything with the only thing it knows: more easy money.
If you look at the combination of higher rates and energy prices, we are really now running at levels that we haven't seen since just going into the financial meltdown. To quantify it, over the past six months, wage income is up $111 million, and outlays on food and energy are up $116 billion.

[...]

It is delicious in its irony, in a way, that QE is really the driver of this commodity bubble, because, obviously, when the Fed started putting rates to artificially low levels, everyone in the U.S. looked somewhere for higher yields. And the obvious place to go was emerging markets, and all the capital flowing into emerging markets fueled their economies and increased their demand for resources. At the same time, debasing the dollar obviously enhanced the allure of holding hard assets, which also benefited commodities. You can find any number of reasons why QE really drove the commodity boom. So if I'm correct that the Fed is going to have to continue this program to protect the U.S. recovery from these threats of higher rates, and food and energy prices, it is kind of ironic that they are going to be pursuing more aggressive quantitative easing, even though that is really what's driving higher rates and commodities.

[...]

If we pursue this logic to its natural conclusion, and the Fed continues with QE, it begets more of the same result, which is just to continue to inflate commodities. Then what happens is that we see commodity prices rise until they reach the point that something breaks. And my thesis is that, during my lifetime, interest rates have always been the catalyst for crisis. Rates backed up to the point that some weak link in the chain broke. This time, however, higher commodity prices will be the catalyst. But, again, it is deliciously ironic that these higher commodity prices are a function of overaggressive, easy monetary policy. In times past, it has always been tight monetary policy that has precipitated the crisis.

[...]

Q. What about the argument that Bernanke and his team had to do something or the economy was going to fall off a cliff, and that they had to create liquidity?

It is easy to sit back and say this. But had the Fed not had that attitude back in 2000, we wouldn't have been in this predicament. The problem is that we serially try to reflate our way out of these problems, rather than taking the pain and letting the economy actually cleanse itself.

This summer is going to be the beginning of the moment of truth. What happens when QE2 is done in June? Can the government go on running deficits of 10% of GDP without causing bond rates to go higher, crushing the recovery? Will the Dirty Fed come back in with QE3? Pomboy leans toward "yes," and given the Dirty Fed's track record, it's hard to disagree.

Pomboy recommends a barbell portfolio of gold and Treasuries. I still prefer cash over Treasuries. Buying Treasuries here is a high-risk, low-reward bet that rates will go a lot lower. With serial deficits in the same league as Greece, I wouldn't trust the U.S. government for 10 years at just 3.5%. What's the upside? If we get inflation, your bonds will get murdered. And if we tip back into severe recession, is that 3.5% really going to pay your Alpo bill?

From the McDanger files

This weekend, Aaron Sorkin may well collect an Oscar or two for savaging the reputation of Mark Zuckerberg. But it's worth noting that Facebook has, in the last three weeks, done more to further freedom and democracy than Hollywood has done in the last one hundred years.

As the people of Tunisia, Egypt, and soon Libya can attest, their liberation is due not to leftist think-tanking or rightist bomb-dropping, but to the simple power of free communication and popular will.

And, having understood the misery of life without freedoms, they rightly rejoice and cling sweetly to a life with them. If only Americans could see as clearly.

Renew the Patriot Act? Sure, why not. Persecute Julian Assange? You bet. Highest incarceration rate in the world? Yep, that's us.

Land of the free, baby. You still drinking it?

-Charlie McDanger

Budgeting for Bad Behavior

Mish posted a story from DetroitNews.com regarding Allen Park, Michigan and how the city sent lay off notices to their entire fire department. It's today's municipal budget reality but one piece of it really rubbed me the wrong way and I fear/imagine that many municipalities practice this.
According to McCurley [city finance director], the city faces a fiscal crunch because revenue in several areas has fallen short of projections. Collections from traffic tickets are $819,000 below what was budgeted, and ambulance billing collections are $200,000 under budget, he said.

Collections from traffic tickets?!? According to the census, this is a town with a population around 28,000 people and they were counting on collecting over $800,000 more than they did in parking tickets?!?

It is absurd that a municipality count on, actually hope that people act badly. And if they don't act badly, if they obey the law then, well, you have to lay people off. How perverse is that??

This isn't the first time I noticed this. In our post from February 9th we mentioned the LA Times budget game. In the game one of the budget items you can control is the projected revenue from installing cameras to fine people who run red lights:
Seriously have these municipalities and those running government lost their minds? You penalize people to STOP BAD BEHAVIOR. If you are successful, if what you did worked, you succeed in making the world a better place and the reward is no revenue because there are no violators. That's what you want! You do not count on bad behavior as A REVENUE STREAM, especially when it entails hoping people run red lights!

Politicians who count on bad behavior instead of attempt to prevent it are at the very least irresponsible, see Allen, MI. At the very worst maybe partially responsible for any horrible accidents that may occur, see California red light cameras.

I mean if you knew a particular street light intersection had frequent red light running violators, wouldn't you do what you could to stop the behavior? Or would you do nothing because the revenue from the tickets is just too sweet?

Bill Fleckenstein: Bernanke has blood on his hands

Dylan Ratigan throws Fleck a softball: Has the Dirty Fed caused commodity inflation?

Real Inflation

I purchased the same sandwich I purchase ever couple of weeks or so at the cafe on the ground floor of the building I work in. The price is the same as always $4.95. Just today, instead of getting both halves of the sandwich, I only get 1 half.

I guess I could shed a few pounds anyway. Thanks Ben, you jerk......

Wall Street Journal: Bernanke has blood on his hands

Fedbashing goes mainstream:
In accounts of the political unrest sweeping through the Middle East, one factor, inflation, deserves more attention. Nothing can be more demoralizing to people at the low end of the income scale—where great masses in that region reside—than increases in the cost of basic necessities like food and fuel. It brings them out into the streets to protest government policies, especially in places where mass protests are the only means available to shake the existing power structure.

[...]

About the only one failing to acknowledge a problem seems to be the man most responsible, Federal Reserve Chairman Ben Bernanke. In a recent question-and-answer session at the National Press Club in Washington, the chairman said it was "unfair" to accuse the Fed of exporting inflation. Other nations, he said, have the same tools the Fed has for controlling inflation.

Well, not quite. Consider, for example, that much of world trade, particularly in basic commodities like food grains and oil, is denominated in U.S. dollars. When the Fed floods the world with dollars, the dollar price of commodities goes up, and this affects market prices generally, particularly in poor countries that are heavily import-dependent. Export-dependent nations like China try to maintain exchange-rate stability by inflating their own currencies to buy up dollars.

Greenspan is still killing, but I think Zimbabwe Ben will easily exceed Greenspan's Body Count with the latest middle East violence and the less visible, but far more widespread, third world hunger.

Richard Lugar gets teabagged

Indiana state Treasurer Richard Mourdock announces primary challenge:
Dick Lugar used to be OUR US Senator.

Now, according to MSNBC, Lugar is “Barack Obama’s Favorite Republican.”

Why?

Dick Lugar voted for Obama’s liberal supreme court nominees — Sonia Sotomayor and Elena Kagan.

Senator Dick Lugar appeared in a 2008 Obama campaign commercial.

Lugar co-sponsored Obama’s DREAM Act that would provide amnesty for illegal immigrants.

Lugar recently expressed support for banning legal firearms in response to the shooting in Tucson.

Dick Lugar voted against earmark reform.

Dick Lugar helped ram the START Treaty through the lame duck session so that newly elected Republican senators couldn’t even consider it.

Simply put, Obama loves having Republican Senator Dick Lugar on his side. But we Republicans in Indiana need someone who will speak for us. Not Barack Obama.

San Diego ♥ Wisconsin

Our friends at the SoCal Tax Revolt Coalition will have a rally and press conference tomorrow at 11am in Kearny Mesa to support Wisconsin Gov. Scott Walker. Local tax-fighting legend Richard Rider will headline.

And if you're around a TV at 6:45 a.m. tomorrow, rumor is that Leslie Eastman will be on KUSI Channel 9.

Snapshots


Las Vegas, 9Feb11. US Navy veteran.

"Are you doing okay?"
"I'm cold."
"Have you eaten lately?"
"I had a cheeseburger. Yesterday."
"Are you hungry?"
"Yes sir."

Full text and graphs of Porter Stansberry's End of America video

There's a video being sent around the Internet (and advertised on radio) about the doom predictions of Porter Stansberry and his prescriptions for protecting yourself financially.

The video is here. I'm not endorsing Mr. Stansberry's views. As bad as our debt crisis is, my view of the likely outcome is not as extreme as Stansberry's. And he makes some silly errors, like attributing gasoline being cheaper in the U.S. than elsewhere to the fact that the global oil trade is priced in dollars rather than lower U.S. taxes and a more competitive retail gasoline market. Despite these shortcomings, though, the video is excellent at illustrating the magnitude of our debt problem.

The video is very long. For those who have a short attention span or a busy day, you can access a text version by clicking to the site, then leaving the site (e.g. by typing www.google.com in the browser bar).  A warning will pop up about leaving the site, and if you click Cancel, you'll be able to read the text version.

Silver never sleeps

As the banksters take the day off for Presidents Day, silver hits $33.50 $34, a new post-Hunt Brothers high, and up 20% 22.5% in February alone. Gold is back up at $1400.

Meanwhile, Zimbabwe Ben is still printing.



Silver and gold never lie to you about their balance sheets. And central bankers can't print silver and gold.

If your financial adviser doesn't have at least a small (~5%) allocation to precious metals, it's time to look for a new financial adviser.

Scenes from a recovery -- Libia and Eddie Lopez

Mother kills son, self because they faced eviction from 8' x 12' shed. The victims were identified as Libia and Eddie Lopez.

Meanwhile, Obama Administration drops charges against Angelo Mozilo, gives IndyMac's Michael Perry a slap on the wrist. And Ben Bernanke continues to print money to enrich Wall Street bankers.

Hope and change!

Big Brother Isn't Just Watching, He's Trying to Friend You on Facebook

Why did the U.S. military buy 500 fake Internet personas?

Read up on the story of one alleged cybersecurity "expert" getting pwned by the very tools he tried to use against the Internet, the Internet fighting back and the bizarre military plan to hoard fake Internet personas and spoofed IP addresses.


You have been warned, children.

Wisconsin round-up

What's at stake in Wisconsin:

"Ending dues deductions breaks the political cycle in which government collects dues, gives them to the unions, who then use the dues to back their favorite candidates and also lobby for bigger government and more pay and benefits," Mr. Siegel told me. After New York City's Transport Workers Union lost the right to automatic dues collection in 2007 following an illegal strike, its income fell by more than 35% as many members stopped ponying up. New York City ended the dues collection ban after 18 months.

Myron Lieberman, a former Minnesota public school teacher who became a contract negotiator for the American Federation of Teachers, says that since the 1960s collective bargaining has so "greatly increased the political influence of unions" that they block the sorts of necessary change that other elements of society have had to accept.

Teachers in Wisconsin make more than double the Wisconsin per capita income -- plus benefits!

Tea Party Patriots rally today to support Gov. Scott Walker.

Madison showdown as Lord of the Rings.

Finally, as the big issue here is "collective bargaining," please read Shane Atwell's excellent backgrounder on why "collective bargaining" is extortion.

Paul Krugman: "Bernanke has blood on his hands"

That's a direct quote, though deliberately misleading in the style of the New York Times' yellow journalism.
If you are familiar with the Times's swindle, you will recognize its method of supplying a brief out-of-context quote, and you will suspect that the quote in context is actually far less invidious than the Times's description would lead you to believe. You will be right.
The Krugman quote in context is "The usual suspects will, of course, go wild over suggestions that global warming has something to do with the food crisis; those who insist that Ben Bernanke has blood on his hands tend to be more or less the same people who insist that the scientific consensus on climate reflects a vast leftist conspiracy."

That's right. Krugman insists that Ben Bernanke's printing presses have absolutely nothing to do with rising food prices. It's all because of Al Gore flying around on his private jet.

I guess global warming must be hurting the silver harvest this year, too.

Matt Taibbi on the Wall Street - Washington kleptocracy

Matt Taibbi in Rolling Stone talks about the same thing we rail about so often here.

Why isn't Wall Street in jail?
[...] But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who's in office or which party's in power.

[...] You want to win elections, you bang on the jailable class. You build prisons and fill
them with people for selling dime bags and stealing CD players. But for stealing a billion dollars? For fraud that puts a million people into foreclosure? Pass. It's not a crime. Prison is too harsh. Get them to say they're sorry, and move on.

Oh, wait — let's not even make them say they're sorry. That's too mean; let's just give them a piece of paper with a government stamp on it, officially clearing them of the need to apologize, and make them pay a fine instead. But don't make them pay it out of their own pockets, and don't ask them to give back the money they stole. In fact, let them profit from their collective crimes, to the tune of a record $135 billion in pay and benefits last year. What's next? Taxpayer-funded massages for every Wall Street executive guilty of fraud?


Taibbi is a lefty, but he absolutely gets this like few commentators anywhere on the political spectrum. His conclusion:
The mental stumbling block, for most Americans, is that financial crimes don't feel real; you don't see the culprits waving guns in liquor stores or dragging coeds into bushes. But these frauds are worse than common robberies. They're
crimes of intellectual choice, made by people who are already rich and who have every conceivable social advantage, acting on a simple, cynical calculation: Let's steal whatever we can, then dare the victims to find the juice to reclaim
their money through a captive bureaucracy. They're attacking the very definition of property — which, after all, depends in part on a legal system that defends everyone's claims of ownership equally. When that definition becomes
tenuous or conditional — when the state simply gives up on the notion of justice — this whole American Dream thing recedes even further from reality.


Read the whole thing. But be sure you're sitting down.

What panic smells like

Think your money is really your money in this crumbling empire? Try carrying it out of the country.

The definition of chutzpah

... is an Economist columnist who cheers Bernanke murdering the bond market

... then complains when the bond market isn't there to carry out its usual function of imposing discipline on federal budgets.
I would expect neither Obama administration Jedi mind tricks or secret deals to yield real budget solutions. Explicit outside pressure, from bond markets, will yield deals. And that pressure is not yet forthcoming.

"R.A.," you've got a lot of nerve. Either that, or you're just monumentally clueless. How can it not have dawned on someone whose job it is to cover the Fed that the Bernanke Fed's primary role is Chief Enabler of Fiscal Irresponsibility?

Carnival of Kyle Bass

Kyle Bass, a hedge fund manager who predicted the housing crash (as did some others) even as Ben Bernanke was repeating "no housing bubble ... subprime is contained ... no recession," is en fuego.

Here's his February 2011 investor letter, a must read.

And no sooner had I cleaned myself up after reading the investor letter, than K-Bass was on CNBC this morning throwing pearls before swine:












Sayonara Japan.













Europe's Day of Reckoning.













Muni Meltdown.

A hard rain's a-gonna fall.

Inflation watch

Producer Price Index (PPI) inflation running at 10% annual rate.

Cotton up 44% YTD -- that's a month and a half!

Budget Deficit Explained in Real Terms

Now this I understand:

HOLY CRAP!

Facebook Revolution?

KFOG's Peter Finch opened the news this morning with:
"Could the next Facebook revolution be brewing in Iran"

Because without Facebook, and Twitter, these people would never have noticed they are starving.

Kind of ironic really that Bernankestein is inflating the cost of everything worthwhile while we play Farmville on Facebook. I mean "I just thought hey, who wouldn't want to run their own farmmmmmm.".

Anyway thanks Facebook, without you revolution wouldn't happen.

UPDATE: I've just been smacked down regarding this post and would like to present the point that doth smacked. That is that the average age of these countries with political unrest situations is around 20. Kids really, those who generally take to technology quickly. And the freest medium to communicate today is Facebook. The Smacker likened Facebook to the colonial presses in the US.

So while my distaste for Facebook being the outlet to tell the world which toilet paper you purchased on any given day remains, I had not considered its communicative potential to express real ideas and organize revolt and will reevaluate it's usefulness in situations like Egypt, Iran, and Yemen.

~ the Smackee

Here it comes: inflation!

New York Times:
Cotton prices are near their highest level in more than a decade, after adjusting for inflation, and leather and polyester costs are jumping as well. Copper recently hit its highest level in about 40 years, and iron ore, used for steel, is fetching extremely high prices. Prices for corn, sugar, wheat, beef, pork and coffee are soaring. Labor overseas is becoming more expensive, meanwhile, and so are the utility bills to keep a factory running.

“There are cost pressures from virtually everywhere,” said Wesley R. Card, the chief executive of the Jones Group, whose brands include Nine West and Anne Klein. After trying to keep retail prices flat or even lower during the recession, Jones says prices for its brands will climb 15 to 20 percent by autumn.

And check out the Billion Prices Project, an MIT program that tracks price changes in real time and thus leads (and is not manipulated like) government stats such as CPI.



High unemployment, rising inflation... Welcome back, Carter! Remember the Misery Index? Can we make a run at the record of 21.98 set in 1980? If we use U-6 unemployment and pre-manipulation CPI, we're already there!

By the percentage of the population on food stamps, we're already far worse than the 70's.

Two canaries

"The difference between an Egyptian canary and an American canary is that the Egyptian canary realizes it's in a cage."
-Charlie McDanger's page-a-day calendar

Ministry of Sound Budgets comes out with proposal

From Yahoo/Reuters:
Obama budget curbs deficit, sets up fiscal fight

WASHINGTON (Reuters) - President Barack Obama proposed a budget on Monday that would cut the deficit by $1.1 trillion over the next 10 years, but Republicans said it did not curb spending deeply enough to meet their demands.

Conservatives say Obama, a Democrat, is a tax-and-spend liberal, and they aim to make the 2012 presidential election a referendum on his fiscal track record.

Details of the proposal provided by the White House before its official release described a $3.729 trillion budget in which the deficit rose to $1.645 trillion in fiscal 2011, then fell sharply to $1.101 trillion in 2012.

A few points:
  1. Budgets are year-to-year plans. They are not 10 year plans so to suggest the impact of a 1 year budget 10 years down the road is, well, for simple people who don't need math to get by.
  2. Increasing the deficit to $1.645 trillion and then claiming it will "fall sharply" to a still staggering $1.101 trillion is, well, for simple people who don't need math to get by.
  3. There are people who believe a country can spend more than they take in forever; they are simple people who don't need math to get by, like Paul Krugman.

If this is the budget that is approved then one has to seriously contemplate what the post-American world will look like because it is impossible to continue down this path. America will fail and it doesn't matter which math illiterate party you are a member of, it's a fact that you cannot spend more than you take in forever. No amount of hatred for the other side will stop that.

Note from an ex-pat

Postcards From Across The Pond writes:
Well, let me tell you what it looks like from out here: you are living in a prison. It’s a nice prison, a big prison—so large you can’t see the walls when you are inside—but surrounded, as it is, by (sometime virtual, sometimes real) barbed wire, armed guards and towers bristling with machine guns, it is a prison, nonetheless.
Read on...

Harsh winter

Ron Paul wins CPAC straw poll

I can't put it any better than Tyler Durden does:
An important advance indicator of leading conservative frontrunners for the presidency was won by Criminal Reserve archnemesis Ron Paul. [...] Now since the mere prospect of "President Paul" sends shivers of mortal terror down the spine of every self-respecting member of the criminal Wall Street syndicate, does this mean that in order to guarantee 4 more years of Teleprompting, JPM and GS will send the Russell to 36,000,000, the unemployment rate to -15%, and the labor participation rate to -100%, just to make sure that the peasantry is content enough and chooses 4 more years of unmitigated dollar debasement and what is rapidly becoming a weekly iPad cadence? With the popularity of American Idol plunging to record lows, the mission to brainwash America for 4 more years may be just that more difficult. Add 15% inflation and the vassals may actually stir for once.

Romney second, then Chris Christie and libertarian ex-gov of New Mexico Gary Johnson. Sarah Palin was dead last, behind even batty Michele Bachmann.

Big gay CPAC party



"Liberal in bed, conservative in the head."

Jerry Brown should take notes

Wisconsin Governor Scott Walker:
Gov. Scott Walker said Friday that thousands of state workers would be laid off if the Legislature does not adopt his budget fix that cuts public worker benefits and takes away almost all union bargaining rights from public workers.

[...]

Speaking at a Capitol news conference, the governor also said the National Guard is ready to take control of state prisons if correctional officers illegally strike or obstruct work. Union officials said they had no such plans.

Tee hee

On photography site kenrockwell.com:
I do this because I love to share. I dream about what I'm going to write all night, then get up at 6AM and hit the keyboard at 6:30AM and don't stop till my wife pulls me off.

IndyMac's Michael Perry charged with securities fraud

Finally, two and a half years after massive fraud and corruption was revealed.

SEC:
The Securities and Exchange Commission today charged three former senior executives at IndyMac Bancorp with securities fraud for misleading investors about the mortgage lender’s deteriorating financial condition.

The SEC alleges that former CEO Michael W. Perry and former CFOs A. Scott Keys and S. Blair Abernathy participated in the filing of false and misleading disclosures about the financial stability of IndyMac and its main subsidiary, IndyMac Bank F.S.B. The three executives regularly received internal reports about IndyMac’s deteriorating capital and liquidity positions in 2007 and 2008, but failed to ensure adequate disclosure of that information to investors as IndyMac sold millions of dollars in new stock.


What took so long? Is this a sign that we're finally going to start seeing some perp walks? Mozilo? Fuld? Lewis?

Nope. Just a slap on the wrist:
The SEC’s complaint against Perry and Keys seeks permanent injunctive relief, an officer and director bar, disgorgement of ill-gotten gains with prejudgment interest, and a financial penalty.

You can commit blatant, massive fraud, blow up the whole economy, and not face a day in jail. It helps to be a Chris Dodd donor, I'm sure.

Realtor lobbyist group NAR whines about losing government subsidies

... because hasn't a government-subsidized mortgage market been such a great thing for America?

Read all about it at Housing Doom, who offers this rebuttal:
The irony is that without some sort of GSE reform, we will be a nation of renters. What is an underwater homeowner but a renter? How can you be a home “owner” if you have no equity? And who is either issuing or guaranteeing virtually all of the mortgages these days? That’s right, the GSEs. Let’s reform them and let folks own their own homes again.

It’s not monetization because it's TEMPORARY!

Bernanke yesterday:
"Monetization would involve a permanent increase in the money supply to basically pay the government's bills through money creation. What we're doing here is a temporary measure which will be reversed so that at the end of this process the money supply will be normalized, the amount of the Fed's balance sheet will be normalized and there will be no permanent increase either in, ah, money outstanding in the Fed's balance sheet or in inflation."

See for yourself:


Now this begs the questions -
HAS ANY GOVERNMENT OR DIRTY PSEUDO/FAKE-GOVERNMENT AGENCY EVER MONETIZED DEBT WITH THE GOAL OF IT BEING A PERMANENT MEASURE?

AND

BECAUSE HE SAYS IT'S TEMPORARY DOES THAT MEAN IT'S NOT MONETIZATION?

Here are a few websites with the definition of debt monetizing. I don't see the word permanent referenced anywhere:

InvestorWords.com
Paying off government debt by printing more money. Leads to inflation

Financial-dictionary.thefreedictionary.com -
(1) To convert government debt from interest-bearing securities into money. Although both the securities and the money are considered government debt, the latter can be used to purchase goods and services. Thus, monetizing the debt is considered an inflationary process and, although it may temporarily depress interest rates, it is likely to result in higher interest rates and lower bond prices in the long run.

(2) In government, to print money in order to repay the national debt. For example, suppose a government is $1 trillion in debt. Theoretically, the government can simply expand the money supply by $1 trillion and reduce the national debt to zero. It is not uncommon for governments monetize their debts, but because it increases the amount of money in circulation, it is considered highly inflationary.

Merriam-webster.com -
expansion of bank deposits through purchases of government securities by commercial banks

The scary thing is that first they change the definition of is, then they change the definition of debt monitization so don't be surprised at all when they change the definitions of 'freedom', 'liberty' and 'democracy'. Because what you're witnessing is the destruction of all three.

Horny RINO Christopher Lee calls it quits

Is there a correlation between being immoral and being a RINO? Between being monumentally stupid and being a RINO? Well, New York's Rep. Christopher Lee was all three and then some.

Lee, ranked 160 by the Club for Growth in 2009 putting him among the worst Republicans on fiscal issues, just resigned after being caught trying to hook up on Craigslist with a woman who was not his wife.

The woman says she cut off contact when she searched for Lee online and concluded he'd lied about his age and occupation. Then she forwarded us the correspondence.

He used his real name, his real e-mail address, he had a Facebook profile publicly available with a picture that looks like the same guy in the topless photo he sent to the woman. Has he not heard of Google?

Political Darwinism at its finest. May he go back to New York and hang out with Eric "The Snorkel" Massa.

Food stamp nation

USDA: 43 million people on food stamps.

But there's a bright spot:
Research shows that every $5 in new SNAP [food stamp] benefits generates as much as $9 in economic activity, the USDA says.

So we can food stamp our way to prosperity! $5 trillion in more food stamps will bring $9 trillion in economic activity! Get Bennie to stop printing dollars and start printing food stamps!

The government of Ventura County knows where it's at!
To boost the number of Ventura County residents receiving food stamps, the Board of Supervisors has OK'd spending almost $770,000 to recruit and enroll them over the next 12 months.

Because if there's one thing we don't have enough of, it's people on food stamps!

California Budget Game

The LA Times has come up with a super fun interface for you the reader to decide what to cut to get rid of California's budget deficit.

The punch line is that if you leave K-12 school funding alone and cut everything else the most they allow you to cut, you still have $11,085,000,000 to go to eliminate the deficit.

Of course then they provide a section on how to "increase" revenue by allowing you to increase taxes in certain areas. In typical MSM fashion though it appears to fail to take into account that when you increase taxes, spending habits change and net revenue may not be what was predicted.

Enjoy: BE JERRY BROWN

Update: the Sac Bee also provides a fun game to stop the brokest state in the union from being broker.

Obama proposes bailout for the states

Gee, who could have seen this coming?

Profligate states to be continually bailed out by the federal government and its wonderful money-printing machine:
The Obama administration is proposing short-term relief to states saddled with unemployment insurance debt, coupled with a delayed increase in the income level used to tax employers for the aid to the jobless.

The administration plans to include the proposal in its budget plan next week. The plan was confirmed to Fox News late Monday by a person familiar with the discussions on the condition of anonymity because the budget plan is still being completed.
Rising unemployment has placed such a burden on states that 30 of them owe the federal government $42 billion in money borrowed to meet their unemployment insurance obligations. Three states already have had to raise taxes to begin paying back the money they owe. More than 20 other states likely would have to raise taxes to cover their unemployment insurance debts. Under federal law, such tax increases are automatic once the money owed reaches a certain level.

So the Obama Administration keeps the Ponzi economy going by handing out borrowed money to everyone unemployed for two years. And then when the economy is allegedly in recovery and it's time to start paying back the "borrowed" funds, wait a minute! Let's not do anything rash!

This is nothing more than another round of state bailouts -- with the biggest bailouts going to the most irresponsible states. And guess what? We keep borrowing and spending and pretending everything is OK through the next election. And then the bill comes due only after Obama has been re-elected.
Under the proposal, the administration would impose a moratorium in 2011 and 2012 on state tax increases and on state interest payments on the debt.

How convenient.

Pot, meet kettle

CalPERS accuses Lehman of fraud.

California Ranks 4 in the Top 5!

We took 4 of the top 5 spots for America's Most Miserable Cities! Now if we could just get a high speed rail that can take us to all these miserable places that we would be perfect.

Pure Evil

Recently we linked to a video hassling the Catholic church. And that institution does have quite a bit to answer for. In its defense, though, at least it's not Scientology.

For an intensively researched, captivating read on everybody's favorite child-trafficking, brain-washing, staff-beating, document-falsifying, leader-enriching, tax exempt organization, click over to the New Yorker.

Deadbeat, broke-ass San Diego GOP skips out on rent, shacks up with Chairman Tony Krvaric

Temple of Mut does some further research on a story first reported by John Lamb in the City Beat.

Click on over to Temple of Mut for the gory details, but the San Diego GOP abandoned its headquarters, broke its lease, left a complete mess behind, and relocated, conveniently, to the private business office of GOP chairman Tony Krvaric.

Sounds like Krvaric had a little expensive extra office space he needed to sublease, doesn't it? Must be nice to be able to bail yourself out with party resources.

If the incompetence and lack of results wasn't enough to get you to abandon the San Diego GOP, how about self-dealing?


Google StreetView image of Krvaric/GOP headquarters. For Lease indeed!

United Forensic College scam

The housing bubble attracted opportunistic, sleazy lenders and mortgage brokers with government-backed easy money.

Likewise, now the higher education bubble is attracting opportunistic, sleazy schools and education brokers.

Last May, we pointed out that Drake College of business was rounding up homeless people to enroll as students to get the federal funds.

Now the federal money is flowing so easy that scammers are setting up web sites to generate referral fees from schools, and posting spam comments all over the Internet to drive traffic to their scam web sites.

Someone recently posted seven different comments on seven different Patch articles under the name "delawoods." All seek to get people to Google "United Forensic College."
Over the next decade, the United States is facing a potential shortage of criminal justice and security professionals, Search for "United Forensic College"

Let me say that the "United Forensic College" is the friendliest, most helpful and accessible college out there right now. The Criminal Justice curriculum isn’t going to overwhelm you.

The spammer using the same name and still trying to drive traffic to "United Forensic College" also appears at the Ventura County Star and Chattanooga Times Free Press and Chicago Now and Youngstown, Ohio's Vindy.com.

But United Forensic College isn't a college. It's a cheap-looking web site (DON'T GO THERE -- I got malware on my computer after visiting it), whose goal appears to be to generate leads and referral fees from schools who want to part suckers from their federal student loan money.

I have no doubt that delawoods is just one of thousands of education brokers out there trying to make a buck by referring naive, federally-funded students to bad, overpriced schools.

Government cheese: it makes the economy go 'round! Too bad the victims won't ever be able to go bankrupt on the student loans.

UPDATE: E-mail spammers are getting in on the action. Trade schools and phony bachelor's programs are hotter than porn, Viagra, and Nigerian bank accounts now. I just received the following e-mail:
Subject: Obtain the career you have always wanted with the Unviersity Dergee you deserve. careerbuilder monkey mail


Yello !
Info

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Ticket to Success. No time wasted!. At your Own Schedule!.

CALL US TODAY AND GIVE YOUR WORK EXPERIENCE THE CHANCE TO EARN YOU THE HIGHER COMPENSATION YOU DESERVE!

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We do not reply to text inquiries, and our server will reject all response traffic.
We apologize for any inconvenience this may have caused you.

Louis CK learns about the Catholic church

With the caveat that this is strong stuff and not safe for work, check out Louis CK and his exploration of Catholicism.

Rand Paul on compromise

Rand Paul's debut speech in the Senate. It's a good one:



And see my new favorite Senator discussing his budget proposals here on CNN and here with Neil Cavuto.

Free speech for me but not for thee

James Taranto on the Common Cause anti-free-speech rally:
So here we have a corporation that advertises itself as a "grassroots organization" while exercising its First Amendment rights to advance the position that corporations do not have First Amendment rights, only individuals do. Some individuals, participating in the corporation's "grassroots" rally, exercise their First Amendment rights in ways that harm the corporation's image. The corporation responds by exercising its First Amendment rights to denounce those individuals for having exercised their First Amendment rights. And it does in its capacity as a faceless corporation, by issuing a statement for which no individual--not even CEO Bob Edgar--takes responsibility.

Susan Roesgen's new gig

Ex-CNN reporter Susan Roesgen, who had real trouble understanding the whole "journalism" concept and berated Tea Partiers she was supposed to be interviewing for not being thankful for Obama's stimulus, is making a comeback at New Orleans' ultra-low-rated WGNO, where she's going to talk about local news and gossip on a bar-themed set:

Anchors Susan Roesgen and LeBron “LBJ” Joseph will sit on bar stools as they introduce and comment on stories in mostly unscripted conversations. There will be a cocktail of the day, as concocted by a local bartender, and each broadcast will conclude with a mini-commentary called “Last Call.”

Clearly, stories will be on the lighter side, and with an emphasis on New Orleans culture. “Kind of a slice of what’s happening today in the city,” WGNO news director Rick Erbach said, citing news-talk radio and the syndicated news-and-entertainment “P.M. Magazine” program of the late 1970s and ’80s as influences on the new half-hour. “Our mantra is, ‘It’s not a traditional newscast.’ ”

[...]

During the November “sweeps” ratings period, WGNO averaged a 1.4 rating (with each rating point representing 1 percent of total TV households, or about 6,360 homes) with its 6 p.m. newscast, which Erbach described as a placeholder until the station could mount “News With a Twist.” That’s down from the 1.9 rating earned in November 2009 by the syndicated game show, “Deal or No Deal.”


It was New Orleans where Roesgen first caught the attention of CNN viewers, cheerfully chirping about a Bush-Hitler caricature.

Now that everyone in Louisiana is going Republican, will Roesgen be able to keep herself from lecturing interview subjects?

Bill Gross: Treasuries are for suckas!

Who is Timmy the Tax Cheat going to find to buy his trillions in debt now that the world's biggest bond manager smells a rat?
To rebalance debt loads and re-equitize financial institutions that should have known better, central banks and policymakers are taking money from one class of asset holders and giving it to another. A low or negative real interest rate for an “extended period of time” is the most devilish of all policy tools. And the asset class holder that it affects, or better yet, “infects,” is the small saver and institutions such as insurance companies and pension funds that hold long-term fixed income assets.

[...] credit spreads, or emerging market returns, or currencies with positive and high real interest rates are more attractive than those old-fashioned gilts and Treasury bonds offering 2–3%. Those are markets that need to be “exorcised” from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint. It is still possible to produce 4–5% returns from a conservatively positioned bond portfolio – you just have to do it with a different mix of global assets.

Domestic bond managers are calling B.S.


Who's left? I know!



QE, baby!


Zimbabwe Ben's Reign of Terror: A Five-Year Retrospective

... over at JDA.

State of the Union

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